Krishna Dayal Gupta vs DEPTT OF POSTS on 16 October 2026

1. Union of India, through the Chief Post Master General, UP Circle, Lucknow.

2. The General Manager (Finance) & Postal Accounts, Sector D Aliganj, Lucknow.

3. The Superintendent of Post Offices, Sultanpur Division, Sultanpur. …..Respondents By Advocate: Smt. Prayagmati Gupta

ORDER (ORAL) Per Hon’ble Mr. Pankaj Kumar, Member-Administrative In this case relating to interest on delayed payment of leave encashment, the applicant has sought following reliefs:-

1. To release interest on delayed payment of Leave Encashment amounting to Rs. 844500/- @12% per annum from the date of due till the actual date of payment.

2. Any other relief, which this Hon'ble Tribunal may deem fit, just and proper under the circumstances of the case, may also be passed.

3. Cost of the present case. 2.1 The facts of the case are that the applicant retired from service on 30.06.2021. Not having received his retirement benefits, he approached this Tribunal in OA No. 376 of 2021 which was disposed of vide judgment and order dated 12.01.2024 in the following terms: “7.1 In view of the facts and circumstances above, the OA is allowed and the respondents are directed to finalize the pension and release retirement benefits, including gratuity, to the applicant within a period of one month from the date of receipt of certified copy of this order. Further, interest shall be paid on the delayed payment at the rate and in the manner applicable to General Provident Fund under rule 65 of the CCS (Pension) Rules, 2021. For removal of any doubt, it is made clear that this order shall sustain in case the departmental proceedings are instituted in the interim.”

2.2 The applicant submitted representations to the respondents and the respondents released various retirement dues to the applicant, including payment of leave encashment. Aggrieved by non-payment of interest on delayed payment of leave encashment, the applicant has preferred this OA.

3. The applicant’s contention is that the respondents are bound to pay interest on delayed payment of leave encashment in light of the judgment and order dated 12.01.2024 and as per the law laid down by Hon’ble Supreme Court.

4. The respondents state that the applicant was identified as a co- offender in a case of misappropriation of Rs. 11,48,945 at HAL, Korwa, Sub-Office and vigilance clearance could not be issued at the time of his retirement; however, leave encashment was sanctioned vide letter dated 03.10.2022. They contend that there is no provision for payment of interest on delayed payment of leave encashment in terms of office memorandum (OM) dated 01.05.2012 issued by the Department of Pension & Pensioners’ Welfare (DPPW).

5. Heard both the parties. 6.1 Perusal of DPPW’s OM dated 01.05.2012 cited by the respondents reveals the following provisions relevant to the present controversy: “Subject: Implementation of recommendations contained in Para 61 of 44th Report of Parliamentary Standing Committee on Home

Affairs – following a time bound schedule for disbursement of pension. ….

2. Rule 68 CCS (Pension) Rules, 1972 provides for payment of interest on delayed payment of gratuity and recovery of interest so paid from the officers responsible for such delay. The recommendations of the Committee on delayed payment of retirement dues was examined in this Department in consultation with Department of Personnel and Training and Department of Expenditure, Ministry of Finance and it was decided to implement the recommendations as below:

(i) All pensioners’ dues are to be settled by strictly following the procedure laid down in Rule 56 to 76 of CCS (Pension) Rules, 1972. ….

(vi) In the matter of delayed payment of leave encashment, the Department of Personnel & Training in their note dated 02.08.1999 had clarified that there was no provision under CCS (Leave) Rules for payment of interest or for fixing responsibility. Moreover, encashment of leave is a benefit granted under Leave Rules and not a pensionary benefit. ….”

It is evident from the provision quoted above that there is no provision for payment of interest on delayed payment of leave encashment under the extant Leave Rules. 6.2 However, it is noted that the proposition of law in regard to the admissibility of interest on delayed payment of leave encashment has been expounded by Hon’ble High Court of Delhi in W.P.(C) No. 13129/2019 Narottam Singh Shami vs Govt of NCTD & Ors in light of Hon’ble Supreme Court’s judgment in S K Dua vs State of Haryana & Anr 2008 (3) SCC 44 in the following manner: “11. At the outset, we would note that it is now settled law that Leave Encashment amount is not a bounty but akin to a fundamental right of the employee. To this effect, we place reliance on the Judgement of the Supreme Court in S.K. Dua (supra) and of this Court in Union of India & Ors. v. Vijay Kumar Gupta, 2025:DHC:6532-DB.

12. Paragraph no. 2(f) of the OM dated 05.10.1999, on which reliance has been placed by the learned Tribunal, reads as under: “(f) In the matter of delayed payment of Leave Encashment, the department of Personnel & Training in their note dated 2.8.99 has clarified that there is no provision under CCS (Leave) Rules for payment of interest or for fixing responsibility. Moreover, encashment of leave is a benefit granted under the leave rules and not a pensionary benefit.”

13. Reading of the above would show that by the above OM, it is only being clarified that there is no provision under the CCS (Leave) Rules, 1972 for payment of interest or for fixing responsibility for the late payment of Leave Encashment. It has further being clarified that the encashment of the leave is a benefit granted under the Leave Rules and not a pensionary benefit. The said OM, therefore, does not prohibit grant of interest on the delayed payment of Leave Encashment but only clarifies that there is no statutory provision mandating the payment of interest.

14. In absence of any such prohibition and even assuming that there is no such rule which provides for payment of interest on the delayed payment of Leave Encashment, the law settled by the Supreme Court in S.K. Dua (supra) would clearly be applicable, and we quote the same as under: “14. In the circumstances, prima facie, we are of the view that the grievance voiced by the appellant appears to be well founded that he would be entitled to interest on such benefits. If there are statutory rules occupying the field, the appellant could claim payment of interest relying on such rules. If there are administrative instructions, guidelines or norms prescribed for the purpose, the appellant may claim benefit of interest on that basis. But even in absence of statutory rules, administrative instructions or guidelines, an employee can claim interest under Part III of the Constitution relying on Articles 14, 19 and 21 of the Constitution. The submission of the learned counsel for the appellant, that retiral benefits are not in the nature of "bounty" is, in our opinion, well founded and needs no authority in support thereof. In that view of the matter, in our considered opinion, the High Court was not right in dismissing the petition in limine even without issuing notice to the respondents.”

15. Applying the above law to the facts of the present case, the petitioner was clearly entitled to grant of interest on the delayed payment of Leave Encashment.”

6.3 It is observed that the respondents’ plea in this OA that there is no provision in the statutory rules for payment of interest on delayed payment of leave encashment has already been examined and adjudicated in Narottam Singh Shami (supra) by taking notice of S K Dua (supra) and it has been held that as the retirement benefits are not in the nature of ‘bounty’, the Government servant would be entitled to grant of interest on delayed payment of leave encashment. 6.4 As the controversy in the instant OA is similar to the controversy adjudicated in Narottam Singh Shami (supra) and in S K Dua (supra), there is no reason to take a different view in the matter.

7.1 In view of the foregoing, this OA is allowed and the respondents are directed to make payment of interest on delayed payment of leave encashment to the applicant as per the Bank rate applicable from the date the leave encashment became due till the date of its actual payment within three months of receipt of certified copy of this order. 7.2 Associated MAs also stand disposed of. 7.3 Parties shall bear their own costs.

(Pankaj Kumar) Member (A)

Warij Warij Yadav Digitally signed by Warij Yadav